For Once, Make Politics No. 2

California needs to hear Gray Davis the governor and leader, not Gray Davis the perpetual candidate, when he delivers his State of the State address to the Legislature Tuesday evening. Davis should not fudge the seriousness of the state’s fiscal situation. And he should refrain from ruling out any new taxes in the effort to offset a $12.4-billion plunge in state revenues.

Nothing should be left off the bargaining table except basic safety net programs that provide food, shelter or health care to low-income workers, those hit hardest by a downturn. Such programs are often administered by local governments, which in the last recession suffered a huge loss when Sacramento diverted revenues to make up a state deficit. The state should not resort to such actions again.

Republicans, eager to bolster their sagging political fortunes before the March 5 statewide primary, are blaming the governor even for the sale of lottery Scratchers after the big prizes were claimed. And they have signaled that they will fight tooth and nail any talk of new taxes. But this is a time when the state desperately needs some real--dare we say it?--statesmanship.

Legislators should not forget that it was a GOP governor, Pete Wilson, who helped the state weather the recession of the early 1990s by agreeing to $14 billion in combined budget cuts and tax increases. An idea that should be considered is one that Wilson embraced a decade ago, a temporary restoration of the top brackets of the state income tax, up to 11%. This would barely dent the permanent federal break that the wealthiest Californians are receiving from President Bush’s tax cuts and would produce as much as $2.5 billion in new revenue.

The Legislature returns from recess today, Davis delivers his speech to a joint session Tuesday and then on Thursday he presents his budget for the fiscal year beginning July 1. Fiscal issues will dominate this session, but other jobs need doing. The state’s energy regulatory structure remains a mess following last year’s crisis, Pacific Gas & Electric Co. still is mired in bankruptcy, and Sacramento is holding billions of dollars worth of power contracts that aren’t worth the money the state paid for them. Another priority is the sale of revenue bonds needed to repay the state’s general fund the $6 billion taken last year to buy electricity.

Many legislators are rushing to introduce bills to deal with terrorism in the wake of the Sept. 11 attacks. The proposals range from making it easier to tap telephones of suspected terrorists to increasing penalties for perpetrating terrorist hoaxes. Some of these may be worthy and necessary, but the Legislature must resist the temptation to enact a host of security laws. Senate leader John Burton (D-San Francisco) correctly notes that this is primarily a federal job.

Davis and the 2002 Legislature face tough, urgent statewide problems as they head into reelection campaigns. If they are paralyzed by the demands of politics they will simply alienate the voters whose view of government was reshaped for the better by Sept. 11.